Screen Survival of Movies at Competitive Theaters: Vertical and Horizontal Integration in a Spatially Differentiated Market

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Abstract

This article empirically examines the effects of vertical integration and horizontal control on the exhibition of films at competing theaters in a market in which some theater owners are integrated into film distribution and others are not. It analyzes the duration of the exhibition runs of movies released by distributors who owned no theaters in Singapore during 2002 and 2003 through a survival model. The estimation shows that films released by these distributors are exhibited for shorter periods in distributor-owned theaters than in independently owned (i.e., unintegrated) theaters, and in theaters that belong to large theater chains than in the theaters of small theater chains. A spatial aspect of competition among theaters with different owners is revealed in the finding that a film is more likely to stay on at the theater at a given time when an adjacent rival theater still runs the same title. The increase in the probability of screen survival due to the spatial rivalry is greater the nearer the competing theater. These results are found when both film and theater-specific variations are controlled for.

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